Synopsis: Parenty appealed from a decision of the Board of Trustees of the Teachers' Pension and Annuity Fund rescinding the deferred retirement pension which had previously been granted under N.J.S.A. 18A:66-36(b), and holding that certain service rendered by him was dishonorable and, therefore, not eligible for credit in the pension fund. Parenty had been a member of the pension system for over eighteen years when in March 1972, he voluntarily left employment with the school system and applied for a deferred retirement allowance to be effective October 1, 1988. The Board of Trustees approved this application in June 1972. On February 16, 1972, Parenty was charged with misapplying federal bank funds, to which he pled guilty on July 25, 1972. The Board of Trustees learned of Parenty's conviction in 1973 when he applied to re-enter the pension system. On September 14, 1978, the Board ruled that Parenty's prior service had been rendered dishonorable by his criminal conviction and thus was not eligible for service credits in the pension system. On December 19, 1979, a full and unconditional presidential pardon was granted Parenty. Parenty argued his prior service was eligible for credits since 1) his service had been honorable, 2) the presidential pardon removed any disability for eligibility, and 3) the Board was estopped from reconsidering its prior approval of the deferred retirement. The administrative law judge found that honorable service is a prerequisite to the granting of a deferred retirement under N.J.S.A. 18A:66- 36 and that Parenty's conviction of misapplication of bank funds under 18 U.S.C.A. Ãµ 2 and 18 U.S.C.A. Ãµ 656 involved moral turpitude, since his criminal activity involved an intent to defraud. Accordingly, the judge concluded that Parenty's conviction rendered his eighteen years of service the pardon received by Parenty did not obliterate the fact that he committed the crime of misapplication of bank funds, since a pardon does not substitute a good character for one that is bad. The administrative law judge rejected Parenty's argument that the Board was estopped from reversing its 1972 grant of a deferred retirement. The judge noted there was no testimony by Parenty on his subjective good faith belief that he was entitled to a deferred retirement, that Parenty had failed to demonstrate a justified reliance on the Board's prior decision resulting in a detrimental change in his position and that no evidence was presented which indicated that Parenty's reliance on the Board's original decision foreclosed alternate opportunities for pension benefits. Accordingly, the administrative law judge concluded that Parenty's service had been rendered dishonorable by his conviction and ordered that the grant of a deferred retirement allowance be rescinded. William S. Greenberg, Esq., for Petitioner Prudence H. Bisbee, Deputy Attorney General for Respondent (John J. Degnan, Attorney General of New Jersey, Attorney)